Gary Gensler

From MarketsWiki
Jump to: navigation, search
Cinnober logo.gif

Gary G. Gensler
G.Gensler.jpg
Occupation former Chairman, Commodity Futures Trading Commission
Location Washington, D.C.
Website www.cftc.gov

Gary Gensler served as the 11th chairman of the Commodity Futures Trading Commission (CFTC) under President Barack Obama from May 2009 to January 3, 2014.[1][2] He was nominated to that position in December of 2008 by president-elect Obama.[3] Gensler succeeded acting CFTC chairman Michael Dunn.

Gensler advocated for bringing reform to the unregulated $400 trillion swaps market after the financial crisis of 2008. Under his leadership, the CFTC implemented swap market reforms contained in the Dodd-Frank Act, including the requirement that the world's largest swap dealers register with the CFTC. He also led the agency in charging five major financial institutions with manipulating the LIBOR and other benchmark interest rates[4] and championed new rules requiring one of the banks, Barclays, to report rates based on actual transactions when possible and to prevent conflicts of interest.[5]

Gensler's term ended on January 3, 2014. Prior to Gensler's departure, President Barack Obama nominated Timothy Massad to succeed Gensler as Chairman. Massad assumed the chairmanship in June 2014.[6][7]

In April 2015, Bloomberg reported that Gensler would join Hillary Clinton's Presidential campaign as chief financial officer.[8]

Background

The U.S. Senate confirmed Gensler to head the CFTC on May 19, 2009.[9] However, Senator Bernie Sanders and another unidentified lawmaker placed a hold on the nomination[10] because Gensler had previously worked alongside Robert E. Rubin and Alan Greenspan to block CFTC proposals to regulate credit default swaps. He also supported the Gramm-Leach-Bliley Act, which enabled the merger of banks, stock brokerage companies, and insurance companies. [11] [12] Credit default swaps have been blamed for having played a role in the collapse of American International Group and Bear Stearns.[13]

Gensler served in the Department of Treasury from 1997 to 2001, first as Assistant Secretary for Financial Markets and later as Under Secretary for Domestic Finance.[14] While assistant Treasury secretary, on Sept. 20, 1998 Gensler visited the offices of Long-Term Capital Management, along with New York Federal Reserve President William McDonough and Executive Vice President Peter Fisher and bankers from J.P. Morgan and Goldman Sachs, to inspect the books of the hedge fund. They discovered the notional value of all of LTCM's position totaled a surprising $1 trillion.[15] This visit was the day before McDonough decided to intervene in the LTCM situation.[16] Gensler subsequently testified to the U.S. House Committee on Banking and Financial Services in May of 1999 about a report from the President's Working Group on Financial Markets titled "Hedge Funds, Leverage, and the Lessons of Long-Term Capital Management."[17]

A Baltimore native,[18] Gensler is a past treasurer of the Maryland Democratic Party. He later sought to become party chairman.[19] Gensler was in charge of the Obama transition team reviewing the SEC,[20] and it was speculated he might be put in charge of that agency.

In March of 2006, Gensler was appointed to the board and named audit chair of Wageworks, an educational benefits organization founded in 2000.[21] Gensler has also served audit committee chair of Strayer Education, Inc., treasurer of the Baltimore Museum of Art and Trustee of The Bryn Mawr School and Enterprise Community Partners as well as a number of other community and civic organizations.

He also acted as a senior advisor to Senator Paul Sarbanes, chairman of the Senate Banking Committee, on drafting the 2002 Sarbanes-Oxley Act.

As undersecretary for domestic finance in 2000, Gensler publicly backed legislation that would have cut Fannie Mae and Freddie Mac's then $2.25 billion line of credit with Treasury.[22] The remarks roiled the debt markets, causing investors to dump securities issued by the two government sponsored enterprises. Subsequently the Treasury department issued a statement reassuring the market that Gensler's testimony did not portend to a policy shift and was not consistent with longstanding Clinton administration policies in this area.[23][24]

Previously, Gensler spent 18 years with Goldman Sachs, where he was co-head of finance, responsible for worldwide controller and Treasury functions. Gensler was a senior advisor for the Hillary Clinton for President Exploratory Committee. He was a Hillraiser fundraiser for Clinton and later contributed to the presidential election campaign of Barack Obama.[25]

He was also the co-author of the book The Great Mutual Fund Trap,[26] which promoted the idea that active trading and investing is an inefficient strategy for individual investors, and that individuals should stick with index and exchange traded funds.[27] Ironically, Gensler's twin brother Robert Gensler runs an actively-managed fund for T. Rowe Price. In a 2003 column, Marketwatch columnist Paul B. Farrell named Gensler and The Great Mutual Fund Trap co-author Greg Baer heroes of fund reform.[28]

Gensler is a mountain climber and marathon runner.[29] As of July of 2012, he had climbed mt. Kilimanjaro and finished nine marathons and one 50-mile race.[30]

Education

Gensler holds an MBA and a bachelor of science degree in economics from the Wharton School of Business at the University of Pennsylvania, where he graduated summa cum laude.

Published Works

References

  1. CME Group Congratulates New CFTC Chairman Gensler. CME Group.
  2. At Center of Derivatives Debate, a Gung-Ho Regulator. Dealbook at the New York Times.
  3. Obama Picks Gary Gensler To Head CFTC. LA Times.
  4. Former Commissioners - Chairman Gary Gensler. CFTC.
  5. Libor Case Energizes a Wall Street Watchdog. The New York Times.
  6. Massad Is Confirmed as Chairman of Futures Commission. The New York Times.
  7. Gensler to Step Down as CFTC Chairman. Wall Street Journal.
  8. Hillary Clinton Said to Hire Former Wall Street Cop as Campaign CFO. Bloomberg.
  9. Senate Confirms Gensler To Head CFTC. Yahoo News.
  10. Gensler's path to CFTC faces rocky road. The Guardian.
  11. What's the Problem with Gary Gensler?. The American Prospect.
  12. Bernie Sanders Blocking Key Obama Nomination. Crooks and Liars.
  13. Brighter Side Of 'Evil' Swaps. The Wall St. Journal.
  14. Gary Gensler Confirmed As Assistant Secretary For Financial Markets. U.S. Treasury.
  15. Case Setup. Risk Institute.
  16. The Failure of Long-Term Capital Management:A Preliminary Assessment By James A. Leach Chairman, House Banking and Financial Services Committee Before House of Representatives, October 12, 1998. U.S. House of Representatives Financial Services Committee.
  17. Treasury Under Secretary Gary Gensler Testimony Before The House Committee On Banking And Financial Services. U.S. Treasury Department.
  18. Marylander Gensler to head Commodity Futures Trading Commission. Baltimore Sun.
  19. Marylander Gensler to head Commodity Futures Trading Commission. Baltimore Sun.
  20. Gensler Leads Transition at the SEC. Wall Street Journal.
  21. WageWorks Appoints New Board Member. WageWorks.
  22. Obama Adviser Summers Backs Push To Break Up GSEs. EasyBourse.
  23. View from Wall Street: The Implied Federal Guarantee Is Key for FHLBanks. Banking on Communities.
  24. Siblings Fat And Sassy. National Journal.
  25. Hillraisers Slow to Donate to Obama, D.N.C.. The New York Observer.
  26. Gary Gensler. WageWorks.
  27. NABE's 50th Annual Meeting, Addressing Future Economic Challenges. National Association for Business Economics.
  28. Heroes and villains in fund reform. MarketWatch.
  29. Libor Case Energizes a Wall Street Watchdog. New York Times.
  30. US advocate of regulation takes on Libor. Financial Times.